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4 Organizational Reasons Why Private Social Networks Fail (Pt. 2 of 4)

Written by Joshua Paul | on September 13, 2011 at 10:09 AM

Last week, I launched this series on why online customer communities fail in order to help business leaders, association executives, and community managers understand and avoid the most common pitfalls. The last post focused on flawed strategies and misaligned goals. This week, we'll look at the reasons that online communities die that relate to the organization and its senior leadership.

Category 2: Structural and Management Challenges to Successful Private Online Communities

As you read this series, it is important to note that failure means different things to different organizations. B2B businesses take the blow to their brand of a dead customer community differently than a large trade or professional association weathers the hit of an online member community that is abandoned. Though each organization experiences the impact of a failed private social network in a unique way, the negatives always outweigh the lessons learned. The negative impacts of an online community that does not make it include:

  • Customer frustration leading to a decrease in customer retention
  • Loss of confidence in leadership by customers or members
  • Competitive disadvantages
  • Public embarrassment resulting in a weakening of your brand
  • Black hole expenditures to keep flailing private online communities alive
  • Deflated internal morale
  • Uncomfortable boardroom explanations
  • Loss of job security

Based on 10 years of providing online community platforms to large businesses and associations, here are 4 of the primary organization-related reasons that private online communities fail and how you can mitigate them.

Reasons #1-12 (the strategy-related reasons) can be found in the first part of this series.

#13) The Organization Does Not Have Enough Customers or Members to Begin With

Though a large majority of organizations would like to jump on the social technology bandwagon and see their profits soar, the reality is that online customer communities and private social networks for members are not the right strategy for every organization.

You need a certain number of target audience members to develop and sustain an active online community. If your business or association supports 1,000 individuals (this could be 1,000 separate customers if you serve individual people OR 250 customers with 4 people at each organization), you can assume that not all of them are going to participate fully in your online community. Assuming that 45% of your customer base or membership participates in your online customer community, let's take a look at the following examples based on Socious' online community research:

Private Social Networks Fail Because They Don't Have Enough Customers or Members

* The assumptions for the percentages in the chart above can be found in Socious' research on member engagement and the 90-9-1 rule of online communities. Organizations using other software platforms may see lower levels of engagement.

Using the ratios in the chart above, you can see that organizations with online communities that support fewer than 2,500 often don't have enough people to create a thriving and sustainable online community since members of the community are often very busy and participation in the online community is only a small fraction of their daily activity. Though it is possible for a small group of passionate members or customers to sustain a community, online communities follow a variation of Metcalfe's Law "“ the value of the community grows exponentially with each new member.

Tip: If your company, association, or user group does not have enough custromers or members to create a thriving online community, it is better to wait until your organization is large enough to support the initiaive than to launch a community that has a strong likelyhood of failure.

#14) The Initiative Is Not Strategic Enough To Provide Value to Senior Management

The senior management team at your organization is under significant pressure from an array of stakeholders. Boards and investors want growth, customers want no-hassle products and services that solve real problems, and staff wants clarity, ownership, and direction.

While your executive team monitors social business strategies on some level, they have most likely risen to their position by remaining very aware of their stakeholder's interests and keeping their organization focused on core strategies. With all of the excitement around implementing a social business platform, keep senior management's goals front and center both during the planning process and after the launch "“ revenue, cost savings, product innovation, measurable engagement, etc.

#15) Senior Management Does Not See a Business-Level Impact Quickly Enough

Planning, launching, and managing a private online customer or member community is a big initiative that takes time to have an impact on key performance metrics. Often, departments across the organization invest time and resources in its success. Everyone is eager to see the impact it has on customer satisfaction, retention, and revenue. Then, launch day comes and goes, and the nothing happens.

To avoid a political or financial backlash from executives who want to pull back from the initiative when they don't see results in the first couple months, be sure to clearly communicate the strategy and set expectations across the organization.

People in the trenches will know the metrics to watch for as you test, measure, and adjust elements of your community. However, executives need a simple outline of the short, medium, and long-term goals for the private social network. It is much easier to tell the CEO that, "we are on track to hit our three month goals" than it is to say, "the community has launched and we're hoping our customers use it."

Tip: To help senior management stay on board with your private online community, establish feasible quick wins during the planning process to get the organization excited about the budding success of the initiative. The positive whispers around the office will surely bubble up to senior executives.

#16) The Organization Did Not Get Enough Help with Implementation, Training, or Launch

A private online community is not a simple social network, especially in the B2B world. Consumer online products, like Twitter, Mint, or YouTube, are designed not to require any help or training. However, private online communities for businesses or industry groups combine the needs of customers who expect a return on their investment, the complexity of your products and services, and the online engagement requirements of your marketing, support, and product teams.

Online communities for business are not a "flip a switch" type of social application. The platform needs to be configured to your unique goals and organization. Systems, like your CRM or membership database, need to pass specific information to and from your online community platform. Staff must be trained. And most importantly, though most online community platforms are well designed and usable, customers or members still need guidance to ensure that they are getting the most out of your online community and products. Often times, associations even hold live or online training for their members to ensure they get the most value from the organization's private online community.

Add to This List

Thanks for comments and ideas on part 1. If you have experienced additional organizational or managerial challenges to an online community's success, add them in the comments section below.

Part 3 in this series focuses on community management-related reasons why online communities don't make it. Feel free to add your community management ideas and experiences in the comments below to have them included in upcoming posts.

Use this guide to evaluate, select, and plan a successful online community for your association.

Topics: Online Community Software, Online Community

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